Israel Emerging as a Giant Energy Player

Israel Emerging as a Giant Energy Player

Little-noticed by the rest of the world amid the negotiations on Iran’s nuclear program and the collapse of the Free Syrian Army is the clear emergence of an entirely new global energy giant in the volatile Middle East. For the first time since the founding of the State of Israel in 1948, that country has discovered what seem to be huge reserves not only of natural gas but now also of oil. Not only does it appear that Israel no longer will need to depend on Saudi Arabia and other Arab oil suppliers. Israel seems set to be in direct competition with its Arab OPEC neighbors as well as Iran for world oil and gas markets. This is a huge new geopolitical complication few have even taken into account.

In November this year, the Israeli oil company, Givot Olam, announced that it had confirmed far larger reserves of oil at its Meged 5 site than previously believed. The company estimates that the field contains 3.5 billion barrels of crude oil. There is one problem with that discovery. The well is located on the Green Line, the armistice line of 1948 that formally separates Israel from the occupied Palestinian territories. Hence, it is unclear how much of the new-found oil wealth actually belongs to Israel. The Israelis claim the Meged site is a few dozen meters inside the Green Line. [1] At today’s oil price, the oil would have a market value of almost $400 billion, enough to have a good fight over.

But Meged new discoveries are far from all. On December 17, Noble Energy, the US partner of Israeli oil companies, Avner and Delek Drilling, announced new discoveries of oil in the waters between Cyprus and Israel in the Eastern Mediterranean. They estimate some 3 billion barrels of oil may lie in deepwater strata between Cypriot and Israeli offshore fields.

The company announced from its Houston Texas headquarters, “Significant exploration potential remains on the Company’s acreage position in the Eastern Mediterranean, with approximately 3 billion barrels of gross unrisked oil potential in the deep Mesozoic play in both Cyprus and Israel and four trillion cubic feet gross of natural gas potential in Cyprus. Current plans are to resume exploration drilling in the Eastern Mediterranean in late 2014 or early 2015.” [2]

In 2010 Noble Energy and its Israeli partners announced the largest new gas field discovery of the decade. A huge gas field in the waters off Tel Aviv towards Cyprus called Leviathan was discovered with enough gas to supply Israel’s needs for perhaps a century and allow her to become a major competitor in the booming natural gas markets in the EU and elsewhere. Two years before Noble and the Israelis had discovered the smaller Tamar field nearby. [3] In March of this year, 2013, Tamar gas began to flow direct to Haifa for the Israeli Electric Company. Suddenly Israeli dependence on her Arab neighbors for gas imports was disappearing.

Then in February this year the Israeli companies Delek and Avner signed an agreement to acquire a 30 percent stake in exploration rights off the southern coast of Cyprus together with Noble Energy. That means Israeli companies have a dominant position in the major gas and potential oil fields not only in Israeli’s offshore Exclusive Economic Zone but also in that of Cyprus. And now Russia’s Putin and the state-owned Gazprom, the world’s largest gas producer, have entered the game.

In February 2013 Gazprom signed a major deal giving Russia a major stake in the future distribution of massive Israeli gas resources from the Tamar field. That deal also included a commitment to build a floating LNG terminal off Cyprus. That Gazprom terminal will convert Israeli and Cypriot gas owned by the Noble-Israeli consortium for onward transmission to Europe or Asia. [4] Delek Energy is in talks on exporting natural gas from Tamar to Cyprus and to South Korea. Shipments to Asia would be by Liquified Natural Gas.

A new Saudi Arabia?

However the real news regarding Israeli energy is the discovery of a mammoth reserve of oil and gas onshore in Israel. Israel has prospective oil shale fields with estimated unconventional oil reserves of more than 250 billion barrels. If that is economically recoverable it would equal the oil reserves of Saudi Arabia. The principal oil share deposits are located southwest of Jerusalem in the Shefla basin.

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Israel discovered Leviathan, the largest gas field in recent years in the eastern Mediterranean

The Shefla Basin shale energy reserves are being developed by a group of investors whose members are notable to put it mildly.

The main Israeli developer of the Shefla Basin is a company called Israeli Energy Initiatives (IEI). IEI is owned by a US based company with the intriguing name, Genie Energy Corporation, a division of IDT Corporation. Among the major shareholders of the mother company of IEI are Jacob Lord Rothschild, the former business partner of just-released Russian oil oligarch Mikhail Khodorkovsky, and scion of the Rothschild banking dynasty. It also includes major Israel supporter, Rupert Murdoch of the News International Corp. And, to add real spice to the cocktail, the new International Advisory Board of the IEI’s parent Genie Energy also includes Dick Cheney, architect of the Iraq war and former CEO of Halliburton, the company that made shale oil and gas technologies feasible about a decade ago. [5]

The exploitation of the Shefla Basin is a major operation. Israel Energy Initiatives has enlisted some of the top people in the global oil industry including a former president of Mobil Oil, Eugene Renna, a former president of Occidental Oil Shale in addition to Halliburton’s Dick Cheney. But the key person is said to be Harold Vinegar, who was Shell Oil’s chief scientist and, with some 240 patents to his name over his 32 years at Shell, who revolutionized the shale oil industry.

Lord Rothschild commented about the potential of the Israeli shale his company is exploiting. He remarked that IEI’s Shefla Basin shale development in the next few years “could transform the future prospects of Israel, the Middle East and our allies around the world.” [6]

What seems to be emerging is a geopolitical potential game changer that within a decade could see Israel emerge as a direct competitor not only of Saudi Arabia and the Arab Gulf OPEC oil countries including gas giant Qatar. It would also pit Israel against Iran.

In 2011 shortly before Israel and Saudi Arabia along with the Obama Administration gave the green light for the terror war that aimed to unseat Syria’s Bashar al-Assad, Assad had signed an agreement with Shi’ite Iran and Shi’ite-dominated Iraq for building a gas pipeline from Iran’s mammoth South Pars gas field in the Persian Gulf via Iraq and Syria on to Lebanon and the Mediterranean where it would flow to the fast-growing EU gas markets.

Saudi Arabia and Israel, with France, Britain and the US in the background, engaged in a coordinated effort to finance Al Qaeda and other foreign mercenaries to bring chaos to Syria and Lebanon. That chaos has meant no pipeline project to date.

The real agenda behind the Western effort to topple Assad clearly has much to do with the political and geopolitical wars to dominate these vast energy markets. The X-factor in all this is what role Putin’s Russia will play in the Israeli developments. The verdict is still open but it is clear that Putin is wasting no second in trying to exploit the growing divide between Washington and Tel Aviv to position Russia as a major factor in the emerging Mediterranean energy transformation.

{p}F. William Engdahl is strategic risk consultant, author and lecturer. He is author of the best-selling book on oil and geopolitics, A Century of War: Anglo-American Oil Politics and the New World Order. It has been published as well in French, German, Chinese, Russian, Czech, Korean, Turkish, Croatian, Slovenian and Arabic. In 2010 he published Gods of Money: Wall Street and the Death of the American Century, completing his trilogy on the power of oil, food and money control.{/p}{p}Mr. Engdahl is one of the more widely discussed analysts of current political and economic developments, and his provocative articles and analyses have appeared in numerous newspapers and magazines and well-known international websites. In addition to discussing oil geopolitics and energy issues, he has written on issues of agriculture, GATT, WTO, IMF, energy, politics and economics for more than 30 years, beginning the first oil shock and world grain crisis in the early 1970's. His book, ‘Seeds of Destruction: The Hidden Agenda of Genetic Manipulation has been translated into eight languages. A new book, Full Spectrum Dominance: Totalitarian Democracy in the New World Order describes the American military power projection in terms of geopolitical strategy. He won a ‘Project Censored Award’ for Top Censored Stories for 2007-08.{/p}{p}Mr. Engdahl has lectured in economics at the Rhein-Main University in Germany and is a Visiting Professor in Economics at Beijing University of Chemical Technology.{/p}{p}After a degree in politics from Princeton University (USA), and graduate study in comparative economics at the University of Stockholm, he worked as an independent economist and research journalist in New York and later in Europe, covering subjects including the politics of energy policy in the USA and worldwide; GATT Uruguay Round trade talks, EU food policies, the grain trade monopoly, IMF policy, Third World debt issues, hedge funds and the Asia crisis.{/p}{p}Engdahl contributes regularly to a number of international publications on economics and political affairs including Asia Times, FinancialSense.com, 321.gold.com, The Real News, Russia Today TV, Asia Inc., GlobalResearch.com, Japan's Nihon Keizai Shimbun, Foresight magazine. He has been a frequent contributor to the New York Grant'sInvestor.com, European Banker and Business Banker International and Freitag and ZeitFragen in Germany, Globus in Croatia. He has been interviewed on various geopolitical topics on numerous international TV and radio programs including Al Jazeera, CCTV and Sina.com (China), CCTV (China) Korea Broadcasting System (KBS), and RT Russian TV. He is a Research Associate of Michel Chossudovsky’s well-respected Centre for Research on Globalization in Montreal, Canada and member of the editorial board of Eurasia magazine.{/p}
{p}Mr. Engdahl has been a featured speaker at numerous international conferences on geopolitical, GMO, economic and energy subjects. Among them are the Ministry of Science and Technology Conference on Alternative Energy, Beijing; London Centre for Energy Policy Studies of Hon. Sheikh Zaki Yamani; Turkish-Eurasian Business Council of Istanbul, Global Investors’ Forum (GIF) Montreaux Switzerland; Bank Negara Indonesia; the Russian Institute of Strategic Studies; the Chinese Ministry of Science and Technology (MOST), Croatian Chamber of Commerce and Economics.{/p}{p}He currently lives in Germany and, in addition to teaching and writing regularly on issues of international political economy and geopolitics, food security, economics, energy and international affairs, is active as a consulting political risk economist for major European banks and private investors. A sample of his writings is available at Oil Geopolitics.net{/p}

11 COMMENTS

Israel’s possible emergence as a key supplier of oil and natural gas is still a decade or two away and where will the rest of the world be in just a single decade? If we have ‘World Government’ as projected within this decade, then Israel’s role is completely marginalized and their acquisitions will become integrated assets with the NWO. Israel’s sovereignty, like every other nation’s will cease to exist. More likely however, world government will come on the heels of world war and Israel will likely be the first huge casualty. Again their projected acquisitions vanish into clouds of debris. On the other hand, if we succeed is stopping the emergence of a world government and freedom and liberty restored within each of the world’s sovereign nations then, we are likely to see the emergence of many new and suppressed technologies that will rapidly replace our dependence on oil and natural gas and their controlling monopolies. In this context 20th Century geopolitics has little relevance.

Ridiculous post. Did you take the time to actually READ what you wrote before posting? Didn’t think so.

The idea that the greatest political minds the world has ever known (Israelis) would allow their country to become marginalized in a post world government order is folly. These people are far smarter than you are Cold Wind.

They’re playing grandmaster level chess while you’re merely learning checkers. I realize that your hatred of the Jews produces this kind of wishful thinking, but wishing won’t make it so.

I was in Cyprus in late Dec ’05…the Cypriots then pegged their Cypriot Pound so high that the US dollar was worth .47 cents and the UK pound .81 cents on Cyprus…But I would still favor the Orthodox Greeks of Cyprus to the wretches of Talmudia!

Re the mention of the Free Syrian Army: Anyone in the FSA who hasn’t re-directed their firepower at the Wahabi -salafist- terrorist friends of john McCain should be shot immediately and their body fed to hogs..

Mr. Engdahl, Does this mean that OPEC will ask Israel to join as a member? Before anyone jumps all over me for that question, remember VT has revealed longstanding relationships between Israel and many of its neighbors.

All the oil belongs to the Palestinians. It is being stolen by the six million, six hundred and fifty thousand illegal jewish, non Semitic religious cult members who are illegal aliens who invaded and are occupying the homeland of the Palestinians. Did I mention they are holocusting the Palestinians?